Economic Development Minister Ebrahim Patel. Picture: Chris Collingridge
Cape Town - Economic Development Minister Ebrahim Patel has announced a R1.5 billion steel competitiveness fund to help qualifying entrepreneurs in the downstream steel sectors to improve their competitiveness.

The Industrial Development Corporation (IDC) also showed strong performance of almost R50bn in fresh investment.

Patel said on Thursday, during his budget vote in Parliament, that the R1.5 billion competitiveness fund would be set up with a seed funding of R95 million in his department. This would be a major boost for the small players in the industry.

He said the sector had bled more than 25000 jobs last year and the government wanted to kick-start competitiveness in the steel sector. But the entrance of the new players was important.

Patel said the IDC would provide additional funds. “The fund will be available to foundries, valve and pump manufacturers, steel fabricators and capital equipment manufacturers, including black industrialists, to help the core of our manufacturing industry to survive difficult global economic conditions,” he said.

Scaw Metals will have new private sector equity partners. They will include foreign investors and black industrialists.

Patel said the fund would address competitiveness issues in the modernisation of plant machinery and equipment, the upgrade of plant machinery and capacity expansion of existing plans.

The IDC will get R95 million from the department of economic development over the next three years.

The fund will target very small and medium enterprises.

Patel also announced the strong performance of the IDC in the year under review. He said the almost R50 billion in fresh investment was the largest in history.

“The IDC, Africa’s largest industrial bank, showed strong performance in tough market conditions,” he said.

Read also: Duty to protect SA steel industry

“It facilitated R47 billion of fresh investment, of which R15.3 billion is from its own funds and the rest from private investor partners. This is the largest yet in its history,” he said.

In another development Patel announced a market inquiry into the high data costs. He said he would ask the Competition Commission to conduct the inquiry. He said high data prices effect users of cellphones, laptops and businesses.

“To promote the new data driven economy and address high data costs, and following discussions with Minister [of Telecommunications and Postal Services Siyabonga] Cwele, I will request the Competition Commission to conduct a market inquiry into this sector and to work with other regulators to establish the facts, identify measures to reduce data costs and make recommendations to the government,” said Patel.

In his written reply in Parliament this week Patel said he was going to ask the Competition Commission to look at the issue of competition in the telecommunications sector.

This followed the decision of the commission not to prosecute MTN and Vodacom for anti-competitive behaviour, following a complaint by Cell C in October 2013.

The competition commission said last month it did not have sufficient evidence to prosecute.